World Shares Gain in Calm Trading Amid US Economic Concerns

Bangkok, Aug 12 (AP) World shares were mostly higher in calm trading on Monday ahead of big reports this week on the state of the US economy.

Germany's DAX picked up less than 0.1 per cent to 17,731.40 and the CAC 40 in Paris edged 0.2 per cent lower, to 7,257.94. In London, the FTSE 100 gained 0.5 per cent to 8,206.25.

The future for the S and P 500 was up 0.2 per cent and that for the Dow Jones Industrial Average was little changed.

Aside from reports on inflation, this week will also bring updates on retail sales and unemployment. Price pressures have abated, economists say, as shoppers look for cheaper alternative products and services, returning to pre-pandemic ways.

In Asian trading on Monday, Hong Kong's Hang Seng edged 0.1 per cent higher, to 17,111.65 and the Shanghai Composite index slipped 0.1 per cent to 2,858.20.

Markets in Tokyo and Bangkok were closed for holidays.

In Seoul, the Kospi jumped 1.2 per cent to 2,618.30, as shares in Samsung Electronics gained 1.1 per cent, tracking advances in Big Tech companies late last week. Taiwan's Taiex advanced 1.4 per cent, as computer chip giant Taiwan Semiconductor Manufacturing Co. added 0.6 per cent and electronics maker Hon Hai Precision Electronics, also known as Foxconn, surged 4.5 per cent.

Australia's S and P/ASX 200 rose 0.5 per cent to 7,813.70.

Last week started with a jolt, as markets were slammed by heavy selling triggered by concerns over whether the US economy may be slowing too quickly. Japanese stocks endured their worst percentage loss since 1987's Black Monday. But it ended on a calmer note after more big US companies joined those reporting better profit for the spring than analysts had expected.

“The recent run in stronger-than-expected US economic data has aided to push back against recession concerns, with rate expectations now suggesting that the US Federal Reserve (Fed) may retain more flexibility in its policy easing process as compared to one that is being forced by higher economic risks,” Yeap Jun Rong of IG said in a commentary.

On Friday, the S and P 500 rose 0.5 per cent, coming off its best day since 2022 and trimming its loss after the week's wild ride to less than 0.1 per cent.

The Dow Jones Industrial Average rose 0.1 per cent and the Nasdaq composite added 0.5 per cent.

The most recent report on jobs in the US raised hopes for the economy after the prior week's frightened investors. Households at the lower end of the income spectrum have been struggling for a while to keep up with still-rising prices, but economists expect the report to show a return to growth after a stall in retail spending during June.

A worst-case scenario would be if Tuesday's and Wednesday's inflation reports show higher-than-expected rises in prices at the wholesale and consumer levels, while the week's other reports show a sharp weakening of the economy.

Worries remain about the strength of the US economy. They dragged Treasury yields lower Friday as investors sought safer places for their money and expectations built for deeper cuts to interest rates coming from the Federal Reserve. The yield on the 10-year Treasury fell to 3.94 per cent from 3.99 per cent late Thursday.

“Market pricing suggests that traders remain nervous about the steady-as-she-goes assessment of policy rates, and the volatility of last week perhaps serves as a warning that we could be only one or two bad prints away from further turmoil,” Benjamin Picton, a senior market strategist at Rabobank, said in a report.

In other dealings early Monday, US benchmark crude oil rebounded, gaining 77 cents to USD 77.61 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, rose 64 cents to USD 80.30 per barrel.

The US dollar rose to 147.40 Japanese yen from 146.63 yen. The euro climbed to USD 1.0926 from USD 1.0919.